Industries Strategies

MODUL 08 MENYESUAIKAN STRATEGI PADA SITUASI INDUSTRI DAN PERUSAHAAN (TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY AND COMPANY
SITUATIONS)
TUJUAN BELAJAR
Understand Several Industry and Market types: Emerging Industries, HighVelocity Markets, Mature Industry, Stagnant or Declining Industries, Fragmented Industries Understand Strategy Horizons Understand Strategies Based on Companys Market Position: Industry Leaders, Stay-on-the Offensive Strategies, Fortify-and Defend Strategy Muscle-Flexing Strategy, Runner-up Firms, and Weak Businesses Comprehend Commandments for Crafting Successful Strategies
KUTIPAN
Tailoring Strategy to Fit Specific Industry and Company Situations The best strategy for a given firm is ultimately a unique construction reflecting its particular circumstances. (Michael E. Porter)
1. INDUSTRI BERKEMBANG (EMERGING INDUSTRIES)
Manajemen Strategis (Strategic Management, SMG) Indra Almahdy
MODUL 08 1/16
MENYESUAIKAN STRATEGI DENGAN SITUASI INDUSTRI DAN PERUSAHAAN TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY AND COMPANY SITUATION
Matching Strategy to a Companys Situation Features of an Emerging Industry New and unproven market Proprietary technology Lack of consensus regarding which of several competing technologies will win out Low entry barriers Experience curve effects may permit cost reductions as volume builds Buyers are first-time users and marketing involves inducing initial purchase and overcoming customer concerns First-generation products are expected to be rapidly improved so buyers delay purchase until technology matures Possible difficulties in securing raw materials Firms struggle to fund R&D, operations and build resource capabilities for rapid growth Strategy Options for Competing in Emerging Industries Win early race for industry leadership by employing a bold, creative strategy Push hard to perfect technology, improve product quality, and develop attractive performance features Move quickly when technological uncertainty clears and a dominant technology emerges Form strategic alliances with Key suppliers or Companies having related technological expertise Capture potential first-mover advantages Pursue New customers and user applications Entry into new geographical areas
Manajemen Strategis (Strategic Management, SMG) Indra Almahdy MODUL 08 2/16
Focus advertising emphasis on Increasing frequency of use Creating brand loyalty Use price cuts to attract price-sensitive buyers Features of High- Velocity Markets Rapid-fire technological change Short product life-cycles Entry of important new rivals Frequent launches of new competitive moves Rapidly evolving customer expectations
2. PASAR YANG BERUBAH CEPAT (HIGH-VELOCITY MARKETS) Features of High-Velocity Markets Rapid-fire technological change Short product life-cycles Entry of important new rivals Frequent launches of new competitive moves Rapidly evolving customer expectations
MODUL 08 3/16
Fig --- Meeting the Challenge of High-Velocity Change
Strategy Options for Competing in High-Velocity Markets Invest aggressively in R&D Develop quick response capabilities Shift resources Adapt competencies Create new competitive capabilities Speed new products to market Use strategic partnerships to develop specialized expertise and capabilities Initiate fresh actions every few months Keep products/services fresh and exciting Keys to Success in Competing in High Velocity Markets Cutting-edge expertise
Speed in responding to new developments Collaboration with others Agility Innovativeness Opportunism Resource flexibility First-to-market capabilities
3. INDUSTRI YANG MATANG (MATURE INDUSTRY)
Industry Maturity: The Standout Features Slowing demand breeds stiffer competition More sophisticated buyers demand bargains Greater emphasis on cost and service Topping out problem in adding production capacity Product innovation and new end uses harder to come by International competition increases Industry profitability falls Mergers and acquisitions reduce number of industry rivals Strategy Options for Competing in a Mature Industry Prune marginal products and models Emphasize innovation in the value chain Strong focus on cost reduction Increase sales to present customers Purchase rivals at bargain prices Expand internationally Build new, more flexible competitive capabilities
MODUL 08 5/16
Strategic Pitfalls in a Maturing Industry Employing a ho-hum strategy with no distinctive features thus leaving firm stuck in the middle Concentrating on short-term profits rather than strengthening long-term competitiveness Being slow to adapt competencies to changing customer expectations Being slow to respond to price-cutting Having too much excess capacity Overspending on marketing Failing to pursue cost reductions aggressively
4. INDUSTRI YANG STAGNAN ATAU MENURUN (STAGNANT OR DECLINING INDUSTRIES) Stagnant or Declining Industries: The Standout Features Demand grows more slowly than economy as whole (or even declines) Competitive pressures intensify rivals battle for market share To grow and prosper, firm must take market share from rivals Industry consolidates to a smaller number of key players via mergers and acquisitions Strategy Options for Competing in a Stagnant or Declining Industry Pursue focus strategy aimed at fastest growing market segments Stress differentiation based on quality improvement or product innovation Work diligently to drive costs down Cut marginal activities from value chain Use outsourcing Redesign internal processes to exploit e-commerce Consolidate under-utilized production facilities Add more distribution channels
Close low-volume, high-cost distribution outlets Prune marginal products Competing in a Stagnant Industry: The Strategic Mistakes Getting embroiled in a profitless battle for market share with stubborn rivals Diverting resources out of business too quickly Being overly optimistic about industrys future (believing things will get better)
5. INDUSTRI YANG TERPECAH-PECAH (FRAGMENTED INDUSTRIES)
Competitive Features of Fragmented Industries Absence of market leaders with large market shares Buyer demand is so diverse and geographically scattered that many firms are required to satisfy buyer needs Low entry barriers Absence of scale economies Buyers require small amounts of customized or made-to-order products Market for industrys product/service may be globalizing, thus putting many companies across the world in same market arena Exploding technologies force firms to specialize just to keep up in their area of expertise Industry is young and crowded with aspiring contenders, with no firm having yet developed recognition to command a large market share Examples of Fragmented Industries Book publishing Landscaping and plant nurseries Womens dresses
Meat packing Paperboard boxes Furniture Competing in a Fragmented Industry: The Strategy Options Construct and operate formula facilities Become a low-cost operator Specialize by product type Specialize by customer type Focus on limited geographic area
6. HORISON STRATEGI (STRATEGY HORIZONS)
Fig. --- Three Strategy Horizons for Sustaining Rapid Growth
Risks of Pursuing Multiple Strategy Horizons
MODUL 08 8/16
Firm should not pursue all options to avoid stretching itself too thin Pursuit of medium- and long-jump initiatives may cause firm to stray too far from its core competencies Competitive advantage may be difficult to achieve in medium- and long-jump businesses that do not mesh well with firms present resource strengths Payoffs of long-jump initiatives may prove elusive
7. STRATEGI BERDASARKAN POSISI PASAR PERUSAHAAN (STRATEGIES BASED ON COMPANYS MARKET POSITION)
Strategies Based on a Companys Market Position Industry leaders Runner-up firms Weak or crisis-ridden firms Industry Leaders: The Defining Characteristics Strong to powerful market position Well-known reputation Proven strategy Key strategic concern How to sustain dominant leadership position Strategy Options: Industry Leaders Stay-on-the-Offensive Strategies Be a first-mover, leading industry change Best defense is a good offense Relentlessly pursue continuous improvement and innovation Force rivals to scramble to keep up Launch fresh initiatives to keep rivals off balance Grow faster than industry, taking market share from rivals
MODUL 08 9/16
Fortify-and-Defend Strategy Make it harder for new firms to enter and for challengers to gain ground Hold onto present market share Strengthen current market position Protect competitive advantage Muscle-Flexing Strategy Types of Runner-up Firms Market challengers Use offensive strategies to gain market share Focusers Concentrate on serving a limited portion of market Perennial runners-up Lack competitive strength to do more than continue in trailing position Obstacles Runner-Up Firms Must Overcome When big size is a competitive asset, firms with small market share face obstacles in trying to strengthen their positions Less access to economies of scale Difficulty in gaining customer recognition Inability to afford mass media advertising Difficulty in funding capital requirements Strategic Options for Runner-Up Firms When big size provides larger rivals with a cost advantage, runner-up firms have two options Build market share Lower costs and prices to grow sales or Out-differentiate rivals in ways to grow sales
Withdraw from market Competitive Strategies for Runner-Up Firms: Building Market Share Strategic options for building market share to overcome cost advantage of larger rivals Use lower prices to win customers from weak, higher-cost rivals Merge or acquire rivals to achieve size needed to capture greater scale economies Invest in new cost-saving facilities and equipment, perhaps relocating operations to countries where costs are lower Pursue technological innovations or radical value chain revamping to achieve cost-savings Strategic Options for Runner-Up Firms Not Disadvantaged By Smaller Size Where big size does not yield a cost advantage, runner-up firms have seven options 1. Offensive strategies to build market share 2. Growth-via-acquisition strategy 3. Vacant niche strategy 4. Specialist strategy 5. Superior product strategy 6. Distinctive image strategy 7. Content follower strategy Offensive Strategies for Runner-Up Firms Best mover-and-shaker offensives Pioneer a leapfrog technological breakthrough Get new/better products into market ahead of rivals and build reputation for product leadership Be more agile and innovative in adapting to evolving market conditions and customer needs
Forge attractive strategic alliances with key distributors and/or marketers of similar products Find innovative ways to dramatically drive down costs to win customers from higher-cost rivals Craft an attractive differentiation strategy Rule of Offensive Strategy Runner-up firms should avoid attacking a leader head-on with an imitative strategy, regardless of the resources and staying power an underdog may have! Growth-via-Acquisition Strategies for Runner-Up Firms Frequently used strategy of ambitious runner-up firms To succeed, top managers must have skills to Assimilate operations of acquired firms, eliminating duplication and overlap, Generate efficiencies and cost savings, and Structure combined resources to create stronger competitive capabilities Vacant Niche Strategies for Runner-Up Firms Focus strategy concentrated on end-use applications market leaders have neglected Characteristics of an ideal vacant niche Sufficient size to be profitable Growth potential Well-suited to a firms capabilities Hard for leaders to serve Specialist Strategy for Runner-Up Firms Strategy concentrated on being a leader based on Specific technology
Product uniqueness Expertise in Special-purpose products Specialized know-how Delivering distinctive customer services Superior Product Strategy for Runner-Up Firms Differentiation-based focused strategy based on Superior product quality or Unique product attributes Approaches Fine craftsmanship Prestige quality Frequent product innovations Close contact with customers to gain input for better quality product Distinctive Image Strategy for Runner-Up Firms Strategy concentrated on ways to stand out from rivals Approaches Reputation for charging lowest price Prestige quality at a good price Superior customer service Unique product attributes New product introductions Unusually creative advertising Content Follower Strategy for Runner-Up Firms Strategy involves avoiding Trend-setting moves and Aggressive moves to steal customers from leaders Approaches
Do not provoke competitive retaliation React and respond Defense rather than offense Keep same price as leaders Attempt to maintain market position Weak Businesses: Strategic Options Launch an offensive turnaround strategy (if resources permit) Employ a fortify-and-defend strategy (to the extent resources permit) Pursue a fast-exit strategy Adopt an end-game strategy Achieving a Turnaround: The Strategic Options Sell off assets to generate cash and/or reduce debt Revise existing strategy Launch efforts to boost revenues Cut costs Combination of efforts Liquidation Strategy Wisest strategic option in certain situations Lack of resources Dim profit prospects May serve stockholder interests better than bankruptcy Unpleasant strategic option Hardship of job eliminations Effects of closing on local community What Is an End-Game Strategy?
MODUL 08 14/16
Steers middle course between status quo and exiting quickly Involves gradually sacrificing market position in return for bigger near-term cash flow/profit Objectives Short-term - Generate largest feasible cash flow Long-term - Exit market Types of End-Game Options Reduce operating budget to rock-bottom Hold reinvestment to minimum Emphasize stringent internal cost controls Place little priority on new capital investments Raise price gradually Trim promotional expenses Reduce quality in non-visible ways Curtail non-essential customer services Shave equipment maintenance When Should an End-Game Strategy be Considered? Industrys long-term prospects are unattractive Building up business would be too costly Market share is increasingly costly to maintain Reduced levels of competitive effort will not trigger immediate fall-off in sales Firm can re-deploy freed-up resources in higher opportunity areas Business is not a major component of diversified firms portfolio of businesses Business does not contribute other desired features to overall business portfolio
8. PANDUAN PEMBUATAN STRATEGI YANG BERHASIL (COMMANDMENTS FOR CRAFTING SUCCESSFUL STRATEGIES)
10 Commandments for Crafting Successful Business Strategies 1. Always put top priority on crafting and executing strategic moves that enhance a firms competitive position for the long-term and that serve to establish it as an industry leader. 2. Be prompt in adapting and responding to changing market conditions, unmet customer needs and buyer wishes for something better, emerging technological alternatives, and new initiatives of rivals. Responding late or with too little often puts a firm in the precarious position of playing catch-up. 3. Invest in creating a sustainable competitive advantage, for it is a most dependable contributor to above-average profitability. 4. Avoid strategies capable of succeeding only in the best of circumstances. 5. Dont underestimate the reactions and the commitment of rival firms. 6. Consider that attacking competitive weakness is usually more profitable than attacking competitive strength. 7. Be judicious in cutting prices without an established cost advantage. 8. Employ bold strategic moves in pursuing differentiation strategies so as to open up very meaningful gaps in quality or service or advertising or other product attributes. 9. Endeavor not to get stuck back in the pack with no coherent long-term strategy or distinctive competitive position, and little prospect of climbing into the ranks of the industry leaders. 10. Be aware that aggressive strategic moves to wrest crucial market share away from rivals often provoke aggressive retaliation in the form of a marketing arms race and/or price wars.
MODUL 08 16/16

Industries Strategies

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MODUL 08 MENYESUAIKAN STRATEGI PADA SITUASI INDUSTRI DAN PERUSAHAAN (TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY AND COMPANY

1. INDUSTRI BERKEMBANG (EMERGING INDUSTRIES)

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

Fig --- Meeting the Challenge of High-Velocity Change

3. INDUSTRI YANG MATANG (MATURE INDUSTRY)

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

5. INDUSTRI YANG TERPECAH-PECAH (FRAGMENTED INDUSTRIES)

6. HORISON STRATEGI (STRATEGY HORIZONS)

Fig. --- Three Strategy Horizons for Sustaining Rapid Growth

Risks of Pursuing Multiple Strategy Horizons

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

Manajemen Strategis (Strategic Management, SMG) Indra Almahdy

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